Just as Apple's iPad mini joins the market of smaller tablets with displays of 7-8 inches, The Verge reports that Microsoft is preparing to launch its own 7-inch tablet. Interestingly, rather than simply being a smaller version of its just-launched 10-inch Surface tablet, the forthcoming "Xbox Surface" tablet will be a gaming-focused device running a scaled down version of Windows.

Alleged specs for the device leaked back in June, and The Verge now says that the leak was indeed accurate at the time, although the company's plans have continued to evolve.

Quote:

The Xbox Surface will likely include a custom ARM processor and high-bandwidth RAM designed specifically for gaming tasks. We're told these specifications could be altered to accommodate an unannounced Intel SoC and that the Xbox Surface is being developed independent of specific hardware architecture. Microsoft's Xbox Surface won't run a full version of Windows, rather this 7-inch tablet will run a custom Windows kernel. Messaging and other tablet functions may be supported, but the focus is on gaming.

Microsoft is said to be operating in strict secrecy on the Xbox Surface project, locking down several buildings on its campus as it apparently brings teams on to develop games and other software for the device. Microsoft is said to also be planning for production of the device to take place at the same dedicated facilities being used for the larger Surface rather than using traditional contract assembly companies like Pegatron or Foxconn.

That was my first thought. They probably want to integrate it with the next version of xbox to compete with wii U's small screen cohort, much like sony did with their Playstation move after the wiimote came out.

Could be an interesting idea for Microsoft. Tablets certainly are hurting the PSP and Nintendo DS lineups, Apple has yet to really fully embrace gaming on the iPad. Gaming is just an after effect of how big of a market the iPad has.